Basing Hiring Decisions on an Applicant’s Workers Compensation History

The Tennessee Supreme Court very recently issued a decision addressing whether an employer that refuses to hire a job applicant because of her past workers’ compensation claims with another employer violates the Tennessee workers compensation statutes and can be sued for “retaliatory failure to hire.”

In that case, the employer was contracted by a hospital to take over housekeeping services that were previously performed by hospital employees. The hospital understandably wanted as smooth a transition as possible and therefore requested that the contractor interview all its former housekeeping staff and consider offering positions to as many of them as possible. While most were re-employed, one was denied employment. This particular employee was seeking a position after being released from medical care following an on the job injury covered by workers’ compensation. There was no question why she was not hired. According to the facts set out in the court opinion, the hiring manager for the prospective employer actually told the applicant the company “would not hire anyone receiving workers’ compensation benefits” and sent emails to other managers to the effect that “she is a workers’ claim waiting to happen.”

Tennessee courts have long held that an employer may not discharge a current employee in retaliation for filing a workers’ compensation claim. Should an employee be terminated for that reason, she can sue the employer for retaliatory discharge and if successful, recover past and future lost wages, other actual damages incurred and punitive damages. That right has never, however, been extended to job applicants under Tennessee law – and that will remain the case as the Tennessee Supreme Court held in favor of the employer, finding that a job applicant does not meet the definition of “employee” under the worker’s compensation statutes (“person … in service of an employer …”).

So are Tennessee employers now safe to base hiring decisions on their job applicants’ known workers’ compensation histories and “weed out” those who are deemed potential liabilities? If that inquiry is confined solely to Tennessee’s workers’ compensation statutes the answer is now “yes.” But the Tennessee Supreme Court does not get the last word on the topic. That is because the Americans with Disabilities Act (ADA), as amended by the Americans with Disabilities Act Amendments Act (ADAAA), also comes into play when employers make hiring decisions based on an applicant’s medical histories and conditions. The ADA is interpreted by its enforcement agency (the EEOC) as prohibiting (1) use of hiring criteria that tend to exclude people with a history of workers’ compensation claims and (2) refusing to employ a person based on the assumption that an applicant will cause an increase in workers’ compensation costs in the future.

The ADA and ADAAA do not completely prohibit employers from inquiring about a job applicant’s medical history, which by definition would include prior job related injuries. When and how an employer may lawfully obtain and consider a job applicant’s medical history, including her workers’ compensation claims history, in making an employment decision is a complicated topic better left for another discussion. For now, it is important to follow two basic guidelines. First, it is never a good practice to refuse to hire individuals simply because they have a workers compensation claim in their past (or any other medical claim or condition for that matter). Managers with hiring responsibility should be specifically instructed to avoid making such decisions. Second, if an employer believes there is a need to understand certain aspects of job applicants’ medical histories for legitimate job related reasons, legal counsel should first be consulted and a fully ADA compliant protocol established.